ESS Tech, Inc.
For the period ended Sep 30, 2025. Filed Nov 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 13, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001819438-25-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001819438-25-000076
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 105 current paragraphs.
53 unchanged; 34 reworded; 16 added; 22 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
COO Appointment
Current report
Our board of directors appointed Jigish Trivedi as our Chief Operating Officer and principal operating officer effective August 18, 2025.
Current report
Yorkville Promissory Note
Current report
On October 14, 2025, we issued the Promissory Note to the Investor in the aggregate principal amount of up to $40 million, in two tranches consisting of a first tranche of $30 million and a second tranche of $10 million, in each case less an original issue discount of 8% and certain fees and expenses. The Promissory Note accrues interest at a rate of 3% per annum, amortizes through maturity and matures on October 14, 2026.
Current report
As of the date of this report, we have repaid $15.0 million of the principal amount of the Promissory Note.
Current report
Yorkville Promissory Note Warrant
Current report
In connection with the Promissory Note, we issued to the Investor the Promissory Note Warrant exercisable for an aggregate number of up to 1,052,104 shares of our common stock. The Promissory Note Warrant has an exercise price of $9.98 per share, payable in cash or, under certain circumstances, pursuant to net exercise. The Promissory Note Warrant is exercisable for five years from the date of issuance.
Current report
As of October 21, 2025, we completed the offering under the SEPA, having sold an aggregate of 6,458,634 shares under the SEPA for total proceeds of $25 million.
Current report
Interest (expense) income, net
Current report
Revenue for the three months ended September 30, 2025 was $0.2 million compared to $0.4 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, revenue was recognized from engineering services related to product site deployment and extended warranty services. For the three months ended September 30, 2024, we recognized revenue for the delivery of one Energy Warehouse and extended warranty services to various customers.
Current report
Interest (expense) income, net
Current report
Interest (expense) income, net was $0.8 million of interest income for the three months ended September 30, 2024 compared to $0.5 million of interest expense for the three months ended September 30, 2025. The interest income for the three months ended September 30, 2024 was earned on our short-term investment portfolio, which was offset in the three months ended September 30, 2025 by interest incurred on our sale-leaseback financing obligation.
Current report
Other (expense) income, net was $108 thousand of expense for the three months ended September 30, 2025 compared to $39 thousand of income for the three months ended September 30, 2024. The change to expense during the three months ended September 30, 2025 was due to discount expenses incurred in the period related to sales made under the SEPA.
Current report
Other (expense) income, net was $77 thousand of expense for the nine months ended September 30, 2025 compared to $2 thousand of income for the nine months ended September 30, 2024. The change to expense during the nine months ended September 30, 2025 was due to discount expenses incurred in the period related to sales made under the SEPA.
Current report
27 - the letter of credit during the three and nine months ended September 30, 2025 and no draws against the letter of credit during the three and nine months ended September 30, 2024.
Current report
On October 14, 2025, we entered into an unsecured promissory note with the Investor in the aggregate principal amount of up to $40 million (the “Promissory Note”), in two tranches consisting of a first tranche of $30 million and a second tranche of $10 million, in each case less an original issue discount of 8% and certain fees and expenses. The Promissory Note accrues interest at a rate of 3% per annum, amortizes through maturity and matures on October 14, 2026. As of the date of this report, the Company has repaid $15.0 million of the principal amount of the Promissory Note.
Removed paragraphs (22)
Previous report
Yorkville Standby Equity Purchase Agreement
Previous report
Sale and Leaseback
Previous report
On July 10, 2025, we entered into a Sale and Leaseback Agreement with UOP, pursuant to which UOP has agreed to purchase the stack assembly line 1 used to build power module stacks for our products, including the Energy Base, for a purchase price of $10.5 million (comprised of $4.0 million in cash and $6.5 million applied to certain pre-payments from UOP), and to lease such equipment back to us. The lease term is for seven years unless terminated early. During the lease term, the monthly lease payment from us to UOP is $186 thousand, pro-rated for any partial month at a daily lease rate of $6 thousand.
Previous report
Bridge Financing
Previous report
On July 10, 2025, we issued unsecured promissory notes to certain of our directors and members of management and the Investor (the “Promissory Notes”) in the aggregate principal amount of $0.9 million. Each Promissory Note was repaid in full with an exit fee of 15% on or before the maturity date of July 24, 2025. In connection with the Promissory Notes, we issued to the noteholders warrants exercisable for an aggregate number of up to 129,312 shares of common stock (the “Bridge Financing Warrants”) at an exercise price of $3.48 per share, payable in cash or, under certain circumstances,
Previous report
21 - pursuant to net exercise. The exercise period will commence the earlier of twelve months from the date of issuance and the date on which our shareholders approve the issuance of the shares issuable upon exercise of the Bridge Financing Warrants. The Bridge Financing Warrants will be exercisable for three years following the date they are first exercisable.
Previous report
Board Compensation
Previous report
Our directors have agreed to forego payment of cash compensation for 2025 under our outside director compensation policy.
Previous report
Production Tax Credits
Previous report
On July 10, 2025, we entered into a Tax Credit Transfer Agreement with SE Global Holdings, LLC (“SEGH”), an affiliate of SB Energy Global Holdings One Ltd. (“SBE”), for a production tax credit transaction for approximately $0.8 million, of which $775 thousand is reimbursable to SEGH in the event SEGH does not exercise the option to purchase certain tax credits by October 31, 2025.
Previous report
Leadership Transition
Previous report
On August 1, 2025, Anthony Rabb, Chief Financial Officer of the Company, was terminated from the Company, effective as of August 1, 2025. The termination was not related to any issues regarding accounting policies, standards or practices, reporting obligations or other regulations, or internal control over financial reporting. Kate Suhadolnik, the Company’s then Controller, was appointed as the interim Chief Financial Officer and assumed the duties as principal financial officer and principal accounting officer of the Company, effective August 1, 2025.
Previous report
Other income, net
Previous report
Interest income, net
Previous report
Other income (expense), net
Previous report
Revenue increased by $2.0 million or 578% from $0.3 million for the three months ended June 30, 2024 to $2.4 million for the three months ended June 30, 2025. During the three months ended June 30, 2025, we delivered and recognized revenue for a higher volume of Energy Warehouses, Energy Centers, and other related equipment compared to the three months ended June 30, 2024, primarily to related parties. The sales to related parties included both completed and in-process energy storage systems and core technology components.
Previous report
Other income, net
Previous report
Interest income, net
Previous report
Other income (expense), net
Previous report
Other income (expense), net decreased by $6 thousand or 33% from $18 thousand of income for the three months ended June 30, 2024 to $12 thousand of income for the three months ended June 30, 2025 due to foreign currency rate fluctuations.
Previous report
Other income (expense), net was $31 thousand of income for the six months ended June 30, 2025 compared to $37 thousand of expense for the six months ended June 30, 2024. The change to income during the six months ended June 30, 2025 is a result of decreased unrealized losses on trading securities and foreign currency rate fluctuations.
Previous report
On July 9, 2025, we entered into the SEPA with the Investor, pursuant to which and subject to the satisfaction of certain conditions, the Investor has committed to purchase shares of our common stock in increments up to an aggregate gross sales price of up to $25.0 million during the 36 months following the date of the SEPA. The shares will be sold at the Company’s option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA). Purchases are subject to certain limitations set forth in the SEPA and as imposed by the NYSE, which may restrict our ability to access funding under this arrangement. Under the applicable rules of the NYSE and pursuant to the Purchase Agreement, in no event may we issue or sell to the Investor shares of common stock in excess of 2,566,333 shares of common stock (the “Exchange Cap”) representing 19.99% of the shares of common stock issued and outstanding as of the effective date of the Purchase Agreement, unless (i) the Company obtains stockholder approval to issue shares of common stock in excess of the Exchange Cap or (ii) the sales of common stock covered by an advance notice are made at a purchase price that complies with the NYSE’s minimum price requirements. Pursuant to the Purchase Agreement, the Investor shall not be obligated to purchase or acquire any shares of common stock under the Purchase Agreement which, when aggregated with all other shares of common stock beneficially owned by the Investor and its affiliates, would result in the beneficial ownership of the Investor and its affiliates (on an aggregated basis) exceeding 4.99% of the then outstanding voting power or number of shares of common stock. We expect that the extent to which we make sales under the SEPA will be determined by, among other things, our liquidity needs, the share price of our common stock during the applicable pricing period for each sale and our ability to obtain stockholder approval for issuances above the Exchange Cap.
Reworded paragraphs (34)
Previous wording
We believe we have the opportunity to establish attractive margin unit economics if we are able to continue to reduce production costs and scale our operations. Our future financial performance will depend on our ability to deliver on these economies of scale with lower product costs. We believe our business model is positioned for scalability due to the ability to leverage the same core technology in the Energy Base’s modularized form for different project size and duration needs across our customer base. We anticipate significant reduction in our cost of goods through our cost reduction initiatives, including design optimization from value engineering, strategic supply chain projects, and further automation of our manufacturing processes. Additionally, significant improvements in manufacturing scale are expected to decrease the cost of materials and direct labor. Compared to 2024, we expect our indirect cost of revenue and operating expenses to increase when we ramp up our manufacturing and sales activities. We further expect an increase in expenses related to the implementation of cost reduction projects and initiatives in our supply chain, manufacturing engineering and research and development functions. Achievement of margin targets and cash flow generation is dependent on the execution of these cost out initiatives.
Current wording
We believe we have the opportunity to establish attractive margin unit economics if we are able to continue to reduce production costs and scale our operations. Our future financial performance will depend on our ability to deliver on these economies of scale with lower product costs. We believe our business model is positioned for scalability due to the ability to leverage the same core technology in the Energy Base’s modularized form for different project size and duration needs across our customer base. We anticipate significant reduction in our cost of goods through our cost reduction initiatives, including design optimization from value engineering, strategic supply chain projects, and further automation of our manufacturing processes. Additionally, significant improvements in manufacturing scale are expected to decrease the cost of materials and direct labor. We expect our indirect cost of revenue and operating expenses to increase when we ramp up our manufacturing and sales activities. We further expect an increase in expenses related to the implementation of cost reduction projects and initiatives in our supply chain, manufacturing engineering and research and development functions. Achievement of margin targets and cash flow generation is dependent on the execution of these cost out initiatives.
Previous wording
We are closely monitoring macroeconomic developments, including global supply chain challenges, foreign currency fluctuations, fluctuations in inflation and interest rates and monetary policy changes, as well as global events, such as the Russia-Ukraine conflict, tensions in the Middle East, and other areas of geopolitical tension around the world, and how they may adversely impact our and our customers’, contractors’, suppliers’ and partners’ respective businesses. In particular, weak economic conditions or significant uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, governmental fiscal, monetary and tax policies, or tariffs and trade restrictions, among others, could adversely impact our and our customers’ business, financial condition and operating results. In addition, general and ongoing tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers, contractors, suppliers and partners. As a result of these macroeconomic forces, during 2024 and the first half of 2025 we experienced supply constraints, increased shipping delays for certain customer contracts, and delays in timing of payments from some of our customers. We believe some or all of these negative trends may continue during the remainder of 2025.
Current wording
We are closely monitoring macroeconomic developments, including global supply chain challenges, foreign currency fluctuations, fluctuations in inflation and interest rates and monetary policy changes, as well as global events, such as the Russia-Ukraine conflict, tensions in the Middle East, and other areas of geopolitical tension around the world, and how they may adversely impact our and our customers’, contractors’, suppliers’ and partners’ respective businesses. In particular, weak economic conditions or significant uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, governmental fiscal, monetary and tax policies, or tariffs and trade restrictions, among others, could adversely impact our and our customers’ business, financial condition and operating results. In addition, general and ongoing tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers, contractors, suppliers and partners. As a result of these macroeconomic forces, during 2024 and the first three quarters of 2025 we experienced supply constraints, increased shipping delays for certain customer contracts, and delays in timing of payments from some of our customers. We believe some or all of these negative trends may continue during the remainder of 2025.
Previous wording
To the extent that challenging macroeconomic conditions persist, we may experience an extension and worsening of these effects as well as additional adverse effects on our business, financial condition, or results of operations in future periods. These effects could include, among others, slower purchasing decisions by existing and potential new customers, additional
Current wording
To the extent that challenging macroeconomic conditions persist, we may experience an extension and worsening of these effects as well as additional adverse effects on our business, financial condition, or results of operations in future periods. These effects could include, among others, slower purchasing decisions by existing and potential new customers, additional delays in timing of payments under our existing customer contracts, further reduction or delays in purchasing decisions by our customers, potential losses of customers as a result of economic distress or bankruptcy, and increased costs for raw materials and freight resulting from inflationary cost pressures.
Previous wording
On August 16, 2022, the President of the United States signed into law the IRA, which extended the availability of investment tax credits (“ITCs”) and production tax credits and made significant changes to the tax credit regime that applies to solar and energy storage products. As a result of changes made by the IRA, the ITC for solar generation projects was extended until at least 2033 and expanded to include stand-alone battery storage projects. This expansion provided more certainty on the tax incentives available to stand-alone battery storage projects in the future. Subject to recently enacted legislation discussed below, we believe the IRA will increase demand for our services due to the extensions and expansions of various tax credits that are critical for our customers’ economic returns, while also providing more certainty in and visibility into the supply chain for materials and components for energy storage systems. On July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) (the “OBBB”) was signed into law by the President of the United States. The OBBB contains a number of changes to the IRA that significantly impact the availability of the ITCs under Sections 48(a) and 48E of the Code as discussed further below, but the Company’s domestic manufacturing and supply chain structure generally should benefit from the addition of foreign entity of concern limitations. We are continuing to evaluate the overall impact and applicability of the IRA and OBBB as guidance is issued and further legislative changes are enacted, including the passage of comparable legislation in other jurisdictions, to our results of operations going forward.
Current wording
On August 16, 2022, the President of the United States signed into law the IRA, which extended the availability of investment tax credits (“ITCs”) and production tax credits and made significant changes to the tax credit regime that applies to solar and energy storage products. As a result of changes made by the IRA, the ITC for solar generation projects was extended until at least 2033 and expanded to include stand-alone battery storage projects. This expansion provided more certainty on the tax incentives available to stand-alone battery storage projects in the future. Subject to recently enacted legislation discussed below, we believe the IRA will increase demand for our services due to the extensions and expansions of various tax credits that are critical for our customers’ economic returns, while also providing more certainty in and visibility into the supply chain for materials and components for energy storage systems. On July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) (the “OBBB”) was signed into law by the President of the United States. The OBBB contains a number of changes to the IRA that significantly impact the availability of the ITCs under Sections 48(a) and 48E of the Code as discussed further below, but the Company’s domestic manufacturing and supply chain structure generally should benefit from the addition of foreign entity of concern limitations. We are continuing to evaluate the overall impact
Previous wording
Interest income, net consists primarily of earned income on our cash equivalents, restricted cash, and short-term investments. These amounts will vary based on our cash, cash equivalents, restricted cash and short-term investment balances, and on market rates.
Current wording
Interest (expense) income, net consists primarily of interest expense on our sale-leaseback financing obligation and earned income on our cash equivalents, restricted cash, and short-term investments. These earned income amounts will vary based on our cash, cash equivalents, restricted cash and short-term investment balances, and on market rates.
Previous wording
Other income (expense), net consists primarily of various gains and losses associated with our short-term investments and other miscellaneous income and expense items.
Current wording
Other (expense) income, net consists primarily of various gains and losses associated with our short-term investments, and other miscellaneous income and expense items.
Previous wording
Comparison of Three and Six Months Ended June 30, 2025 to Three and Six Months Ended June 30, 2024
Current wording
Comparison of Three and Nine Months Ended September 30, 2025 to Three and Nine Months Ended September 30, 2024
Previous wording
Revenue decreased slightly by $0.1 million or 4% from $3.1 million for the six months ended June 30, 2024 to $3.0 million for the six months ended June 30, 2025. During the six months ended June 30, 2025, we delivered and recognized revenue for Energy Warehouses, Energy Centers, and other related equipment and recognized revenue for extended warranty services. During the six months ended June 30, 2024, we delivered and recognized revenue for Energy Warehouses and recognized revenue for extended warranty services.
Current wording
Revenue decreased by $0.3 million or 8% from $3.4 million for the nine months ended September 30, 2024 to $3.2 million for the nine months ended September 30, 2025. During the nine months ended September 30, 2025, we delivered and recognized revenue for both completed and in-process Energy Warehouses, Energy Centers, and other related equipment, primarily to related parties, and recognized revenue for extended warranty services. During the nine months ended September 30, 2024, we delivered and recognized revenue for Energy Warehouses and recognized revenue for extended warranty services.
Previous wording
Cost of revenue decreased by $4.3 million or 37% from $11.7 million for the three months ended June 30, 2024 to $7.5 million for the three months ended June 30, 2025 as a result of lower net realizable value adjustments in 2025 due to reduced inventory purchases and the utilization of inventory previously expensed during the research and development phase, which we transitioned out of in the third quarter of 2023.
Current wording
Cost of revenue decreased by $7.8 million or 61% from $12.7 million for the three months ended September 30, 2024 to $4.9 million for the three months ended September 30, 2025 as a result of fewer deliveries of equipment to customers and lower net realizable value adjustments in 2025 due to reduced inventory purchases.
Previous wording
Cost of revenue decreased by $6.7 million or 29% from $22.9 million for the six months ended June 30, 2024 to $16.2 million for the six months ended June 30, 2025 as a direct result of the implementation of product cost-saving initiatives. The benefits realized were partially offset by a significant benefit realized during the six months ended June 30, 2024 related to the utilization of inventory previously expensed during the research and development phase, which we transitioned out of in the third quarter of 2023.
Current wording
Cost of revenue decreased by $14.5 million or 41% from $35.6 million for the nine months ended September 30, 2024 to $21.1 million for the nine months ended September 30, 2025 as a direct result of the implementation of product cost-saving initiatives and fewer deliveries of equipment to customers. The benefits realized were partially offset by a significant benefit realized during the nine months ended September 30, 2024 related to the utilization of inventory previously expensed during the research and development phase, which we transitioned out of in the third quarter of 2023.
Previous wording
Research and development expenses decreased by $1.4 million or 50% from $2.8 million for the three months ended June 30, 2024 to $1.4 million for the three months ended June 30, 2025. The decrease was driven by decreased personnel-related expenses, including stock-based compensation, decreased outside services expenses, and decreased purchases of testing equipment and supplies.
Current wording
Research and development expenses decreased by $1.7 million or 62% from $2.7 million for the three months ended September 30, 2024 to $1.0 million for the three months ended September 30, 2025. The decrease was driven by decreased personnel-related expenses, including stock-based compensation, decreased outside services expenses, and decreased purchases of testing equipment and supplies.
Previous wording
Research and development expenses decreased by $2.5 million or 39% from $6.4 million for the six months ended June 30, 2024 to $3.9 million for the six months ended June 30, 2025. The decrease resulted from reduced personnel-related expenses, including stock-based compensation, and reduced purchases of testing equipment and supplies.
Current wording
Research and development expenses decreased by $4.1 million or 46% from $9.1 million for the nine months ended September 30, 2024 to $4.9 million for the nine months ended September 30, 2025. The decrease resulted from reduced personnel-related expenses, including stock-based compensation, reduced purchases of testing equipment and supplies, and decreased outside services expenses.
Previous wording
Sales and marketing expenses decreased by $1.4 million or 52% from $2.7 million for the three months ended June 30, 2024 to $1.3 million for the three months ended June 30, 2025. The decrease is driven by decreased outside services and professional expenses, marketing and trade show expenses, and reduced personnel-related expenses, including stock-based compensation.
Current wording
Sales and marketing expenses decreased by $2.2 million or 86% from $2.5 million for the three months ended September 30, 2024 to $0.4 million for the three months ended September 30, 2025. The decrease is driven by reduced personnel-related expenses, including stock-based compensation, decreased outside services and professional expenses, and marketing and trade show expenses.
Previous wording
Sales and marketing expenses decreased by $1.5 million or 31% from $4.7 million for the six months ended June 30, 2024 to $3.3 million for the six months ended June 30, 2025. The decrease is driven by decreased outside services and professional expenses, marketing and trade show expenses, and reduced personnel-related expenses, including stock-based compensation.
Current wording
Sales and marketing expenses decreased by $3.7 million or 50% from $7.3 million for the nine months ended September 30, 2024 to $3.6 million for the nine months ended September 30, 2025. The decrease is driven by reduced personnel-related expenses, including stock-based compensation, decreased outside services and professional expenses, and decreased marketing and trade show expenses.
Previous wording
General and administrative expenses decreased by $2.5 million or 40% from $6.2 million for the three months ended June 30, 2024 to $3.7 million for the three months ended June 30, 2025. The decrease is due to decreased personnel-related expenses, including stock-based compensation, and decreased professional and outside services costs, director fees, and insurance fees.
Current wording
General and administrative expenses decreased by $2.4 million or 39% from $6.1 million for the three months ended September 30, 2024 to $3.7 million for the three months ended September 30, 2025. The decrease is due to decreased personnel-related expenses, including stock-based compensation, and decreased director fees and insurance fees.
Previous wording
General and administrative expenses decreased by $2.4 million or 21% from $11.7 million for the six months ended June 30, 2024 to $9.3 million for the six months ended June 30, 2025. The decrease is driven by decreased personnel-related expenses, including stock-based compensation expense, as a result of reduced executive compensation, decreased IT expenses and decreased insurance fees, partially offset by increased professional and outside services costs.
Current wording
General and administrative expenses decreased by $4.8 million or 27% from $17.8 million for the nine months ended September 30, 2024 to $13.0 million for the nine months ended September 30, 2025. The decrease is driven by decreased personnel-related expenses, including stock-based compensation expense, as a result of reduced executive compensation, decreased IT expenses and decreased insurance fees, partially offset by increased professional and outside services costs.
Previous wording
Interest income, net decreased by $2.0 million or 89% from $2.3 million for the six months ended June 30, 2024 to $0.2 million for the six months ended June 30, 2025. The decrease resulted from a decrease in interest income earned on our short-term investment portfolio due to lower investment balances.
Current wording
Interest (expense) income, net was $3.1 million of interest income for the nine months ended September 30, 2024 compared to $0.2 million of interest expense for the nine months ended September 30, 2025. The change resulted from a decrease in interest income earned on our short-term investment portfolio due to lower investment balances compounded by interest incurred on our sale-leaseback financing obligation.
Previous wording
The change in fair value of common stock warrant liabilities resulted in gains of $0.3 million and $0.1 million for the six months ended June 30, 2025 and June 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Current wording
The change in fair value of common stock warrant liabilities resulted in gains of zero and $0.3 million for the three months ended September 30, 2025 and September 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Previous wording
The change in fair value of common stock warrant liabilities resulted in gains of $0.5 million and $0.1 million for the three months ended June 30, 2025 and June 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Current wording
The change in fair value of common stock warrant liabilities resulted in gains of $0.3 million and $0.5 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Previous wording
Since our inception, we have financed our operations primarily through the issuance and sale of equity and debt securities and loan agreements. We have incurred losses since inception and have negative cash flows from operations. We anticipate that losses will continue in the near term. During the six months ended June 30, 2025, we incurred net losses of $29.1 million and used $30.6 million of cash in operating activities. As of June 30, 2025, we had unrestricted cash and cash equivalents of $0.8 million. We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements and essential business functions, and the implementation of a furlough for a substantial number of our employees as of May 30, 2025 to better align organizational costs with business continuity, further reduction of material purchases by continuing to minimize spending until firm orders are received, refining our focus on R&D and engineering project efforts towards highest priority, greatest return projects and additional reduction in outside vendor spending, and we may implement further measures.
Current wording
Since our inception, we have financed our operations primarily through the issuance and sale of equity and debt securities and loan agreements. We have incurred losses since inception and have negative cash flows from operations. We anticipate that losses will continue in the near term. During the nine months ended September 30, 2025, we incurred net losses of $39.5 million and used $36.4 million of cash in operating activities. As of September 30, 2025, we had unrestricted cash and cash equivalents of $3.5 million. We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements and essential business functions, and the implementation of a furlough for a substantial number of our employees as of May 30, 2025 to better align organizational costs with business continuity, further reduction of material purchases by continuing to minimize spending until firm orders are received, refining our focus on R&D and engineering project efforts towards highest priority, greatest return projects and additional reduction in outside vendor spending.
Previous wording
Despite the cost reductions and cash conservation measures, we will need additional debt or equity financing in order to meet our near-term operating cash flow requirements, and accordingly substantial doubt exists as to our ability to continue as a going concern for 12 months from the issuance of the condensed financial statements included in this Quarterly Report on Form 10-Q. We have based our near-term operating cash flow requirements on certain assumptions, including consistency of cash usage with cash usage in the second quarter of 2025, continued cooperation from vendors with respect to payment plans for outstanding invoices, absence of additional severance costs or other unanticipated contingencies and continued sales under the SEPA, which may prove to be wrong, and we may use our available capital resources sooner than we currently expect. In addition, we may not be successful in raising additional funds.
Current wording
Despite the cost reductions and cash conservation measures, we will need additional debt or equity financing in order to meet our near-term operating cash flow requirements, and accordingly substantial doubt exists as to our ability to continue as a going concern for 12 months from the issuance of the condensed financial statements included in this Quarterly Report on Form 10-Q. We have based our near-term operating cash flow requirements on certain assumptions, including consistency of cash usage with cash usage in the third quarter of 2025, continued cooperation from vendors with respect to payment plans for outstanding invoices, absence of additional severance costs or other unanticipated contingencies, which may prove to be wrong, and we may use our available capital resources sooner than we currently expect. In addition, we may not be successful in raising additional funds.
Previous wording
Management has taken a variety of steps to mitigate costs, reduce operating expenses and extend our runway while we are evaluating various strategies to obtain additional funding, which may include sales under the SEPA, additional offerings of equity, issuance of debt, or other capital sources. If such financing is not available or if the financing terms are less desirable than we expect, we may be forced to decrease our level of investment in product development or further scale back our operations, which could have an adverse impact on our business and financial prospects.
Current wording
Management has taken a variety of steps to mitigate costs, reduce operating expenses and extend our runway while we are evaluating various strategies to obtain additional funding, which may include additional offerings of equity, issuance of debt, or other capital sources. If such financing is not available or if the financing terms are less desirable than we expect, we may be forced to decrease our level of investment in product development or further scale back our operations, which could have an adverse impact on our business and financial prospects.
Previous wording
We had a standby letter of credit with First Republic Bank for $75 thousand as security for an operating lease of office and manufacturing space in Wilsonville, Oregon secured by a restricted certificate of deposit totaling $75 thousand. As of December 31, 2024 the certificate of deposit was recorded as restricted cash, non-current. The letter of credit expired during February 2025 and as of June 30, 2025 the certificate of deposit was no longer recorded as restricted cash. There were no draws against the letter of credit during the three and six months ended June 30, 2025 and 2024.
Current wording
We had a standby letter of credit with First Republic Bank for $75 thousand as security for an operating lease of office and manufacturing space in Wilsonville, Oregon secured by a restricted certificate of deposit totaling $75 thousand. As of December 31, 2024 the certificate of deposit was recorded as restricted cash, non-current. The letter of credit expired during February 2025 and as of September 30, 2025 the certificate of deposit was no longer recorded as restricted cash. There were no draws against the letter of credit during the three and nine months ended September 30, 2025 and 2024.
Previous wording
We have a standby letter of credit with Bank of America for $0.6 million as security for the performance and payment of the Company’s obligations under a customer agreement. The letter of credit is in effect until the date on which the warranty period under the agreement expires, which is anticipated to be more than a year from the balance sheet date. As of June 30, 2025, $0.6 million was pledged as collateral for the letter of credit and recorded as restricted cash, non-current. There were no draws against the letter of credit during the three and six months ended June 30, 2025 and 2024.
Current wording
We have a standby letter of credit with Bank of America for $0.6 million as security for the performance and payment of the Company’s obligations under a customer agreement. The letter of credit is in effect until the date on which the warranty period under the agreement expires, which is anticipated to be more than a year from the balance sheet date. As of September 30, 2025, $0.6 million was pledged as collateral for the letter of credit and recorded as restricted cash, non-current. There were no draws against the letter of credit during the three and nine months ended September 30, 2025 and 2024.
Previous wording
We have a standby letter of credit with Bank of America for $0.2 million in support of our customs and duties due on imported materials. The letter of credit is in effect until May 19, 2026. As of June 30, 2025, $0.2 million was pledged as collateral for the letter of credit and recorded as restricted cash, current. There were no draws against the letter of credit during the three and six months ended June 30, 2025 and 2024.
Current wording
We have a standby letter of credit with Bank of America for $0.2 million in support of our customs and duties due on imported materials. The letter of credit is in effect until May 19, 2026. As of September 30, 2025, $0.1 million was pledged as collateral for the letter of credit and recorded as restricted cash, current. There were draws of $0.1 million made against
Previous wording
We also maintain a shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $300 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units. On March 31, 2025, we entered into an at-the-market sales agreement with Robert W. Baird & Co. Incorporated (“Baird”), pursuant to which we may sell, from time to time, shares of common stock having an aggregate offering price of up to $13,504,438, in such share amounts as we may specify by notice to Baird (the “ATM Offering”). During the three months ended June 30, 2025, we sold 616,264 shares under the ATM Offering for total proceeds, net of commission fees, of $0.7 million. On July 11, 2025, we terminated our continuous offering under the prospectus supplement dated March 31, 2025 related to the ATM Offering.
Current wording
Our current shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $300 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units, expires on November 17, 2025; however, we intend to file a replacement shelf registration statement on Form S-3.
Previous wording
On July 9, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (the “Investor”), pursuant to which and subject to the satisfaction of certain conditions, the Investor has committed to purchase shares of our common stock in increments up to an aggregate gross sales price of up to $25.0 million during the 36 months following the date of the SEPA. The shares will be sold at our option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA) and purchases are subject to certain limitations set forth in the SEPA and as imposed by the NYSE.
Current wording
On July 9, 2025, we entered into the SEPA with the Investor, pursuant to which the Investor purchased shares of our common stock in increments up to an aggregate gross sales price of up to $25.0 million. The shares were sold at the Company’s option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA). During the three months ended September 30, 2025, we sold 2,244,940 shares under the SEPA for total proceeds of $3.6 million. As of October 21, 2025, we completed the offering under the SEPA, having sold an aggregate of 6,458,634 shares under the SEPA for total proceeds of $25 million.
Previous wording
Net cash used in operating activities was $30.6 million for the six months ended June 30, 2025, which is comprised of net loss of $29.1 million partially offset by depreciation and amortization expense of $3.1 million and stock-based compensation of $2.7 million. Net changes in operating assets and liabilities used $7.0 million of cash driven by decreases in deferred revenue, accrued and other current liabilities, and accrued product warranties, partially offset by an increase in inventory and accounts payable.
Current wording
Net cash used in operating activities was $36.4 million for the nine months ended September 30, 2025, which is comprised of net loss of $39.5 million partially offset by depreciation and amortization expense of $4.6 million, stock-based compensation of $3.9 million, and non-cash lease expense of $1.1 million. Net changes in operating assets and liabilities used $6.0 million of cash driven by decreases in accrued and other current liabilities, deferred revenue, operating lease liabilities, and accrued product warranties, partially offset by an increase in prepaid expenses and other assets and inventory.
Previous wording
Net cash used in operating activities was $34.1 million for the six months ended June 30, 2024, which is comprised of net loss of $40.3 million, and noncash interest income of $1.6 million, partially offset by stock-based compensation of $5.9 million, inventory write-downs and losses on noncancellable purchase commitments of $1.5 million, and depreciation and amortization expense of $2.5 million. Net changes in operating assets and liabilities used $2.8 million of cash driven by decreases in inventory, accrued and other current liabilities, deferred revenue, operating lease liabilities, and an increase in prepaid and other current assets, partially offset by cash collections on accounts receivable, an increase in accounts payable, and an increase in accrued product warranties.
Current wording
Net cash used in operating activities was $51.7 million for the nine months ended September 30, 2024, which is comprised of net loss of $62.7 million, and noncash interest income of $2.1 million, partially offset by stock-based compensation of $8.5 million and depreciation and amortization expense of $3.3 million. Net changes in operating assets and liabilities provided $0.4 million of cash driven by cash collections on accounts receivable, an increase in accounts payable, and an increase in accrued product warranties, partially offset by decreases in inventory, accrued and other current liabilities, deferred revenue, operating lease liabilities, and an increase in prepaid and other current assets.
Previous wording
Net cash provided by investing activities was $16.9 million for the six months ended June 30, 2025, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Current wording
Net cash provided by investing activities was $17.3 million for the nine months ended September 30, 2025, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Previous wording
Net cash provided by investing activities was $50.2 million for the six months ended June 30, 2024, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Current wording
Net cash provided by investing activities was $43.9 million for the nine months ended September 30, 2024, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Previous wording
Net cash provided by financing activities was $803 thousand for the six months ended June 30, 2025, which consisted of proceeds from the issuances of common stock under the ATM Offering and proceeds from our ESPP, offset by repurchases of shares from employees for income tax withholding purposes.
Current wording
Net cash provided by financing activities was $8.9 million for the nine months ended September 30, 2025, which consisted of proceeds from the issuances of common stock under the SEPA and an at-the-market offering, proceeds from financing arrangements and proceeds from our ESPP, offset by repurchases of shares from employees for income tax withholding purposes.
Previous wording
Net cash provided by financing activities was $57 thousand for the six months ended June 30, 2024, which consisted of proceeds from our ESPP and stock options exercised, offset by repurchases of shares from employees for income tax withholding purposes.
Current wording
Net cash provided by financing activities was $49 thousand for the nine months ended September 30, 2024, which consisted of proceeds from our ESPP and stock options exercised, offset by repurchases of shares from employees for income tax withholding purposes.
Previous wording
Our contractual obligations and other commitments as of June 30, 2025 consist of lease commitments and two standby letters of credit and the Credit Agreement. The letters of credit serve as security for our performance and payment obligations under a customer agreement and in support of our customs and duties due on imported materials and are secured by a total of $0.8 million pledged as collateral. Financial obligations under the Credit Agreement will be secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement that decreases upon the equity raise milestone and will be reported as restricted cash. There were no draws against the letters of credit or under the Credit Agreement during the three and six months ended June 30, 2025 and 2024. Additionally, we are committed to noncancellable purchase commitments of $0.2 million as of June 30, 2025 and to reimburse UOP a minimum of $8.0 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).
Current wording
Our contractual obligations and other commitments as of September 30, 2025 consist of lease commitments and two standby letters of credit and the Credit Agreement. The letters of credit serve as security for our performance and payment obligations under a customer agreement and in support of our customs and duties due on imported materials and are secured by a total of $0.7 million pledged as collateral. Financial obligations under the Credit Agreement will be secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement that decreases upon the equity raise milestone and will be reported as restricted cash. There were draws of $0.1 million made against the letters of credit during the three and nine months ended September 30, 2025 and no draws against the letters of credit during the three and nine months ended September 30, 2024. Additionally, we are committed to noncancellable purchase commitments of $0.2 million as of September 30, 2025 and to reimburse UOP a minimum of $8.0 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
23 - and applicability of the IRA and OBBB as guidance is issued and further legislative changes are enacted, including the passage of comparable legislation in other jurisdictions, to our results of operations going forward.
Current report — wording carried from elsewhere
On March 31, 2025, we entered into an at-the-market sales agreement with Baird, pursuant to which we sold 616,264 shares for total proceeds, net of commission fees, of $0.7 million. On July 11, 2025, we terminated our continuous offering under the prospectus supplement dated March 31, 2025 related to the at-the-market offering and on November 10, 2025, we terminated the sales agreement.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
22 - delays in timing of payments under our existing customer contracts, further reduction or delays in purchasing decisions by our customers, potential losses of customers as a result of economic distress or bankruptcy, and increased costs for raw materials and freight resulting from inflationary cost pressures.
Previous report — wording carried elsewhere
Interest income, net decreased by $1.0 million or 97% from $1.1 million for the three months ended June 30, 2024 to $30 thousand for the three months ended June 30, 2025. The decrease resulted from a decrease in interest income earned on our short-term investment portfolio due to lower investment balances.